Table of Contents

Developments in Trademark Practice. 1

China's Top Market Regulator to Strengthen Crackdown on IPR Infringements. 1

China Boasts World's Most Applications for New Agricultural Plant Varieties Rights. 1

CNIPA Enhances Protection of Integrated Circuit Layout Design. 2

China Spends Big on IPR Royalties, Values Innovation More. 2

Huawei Tops WIPO Patent Applications. 2

Beijing Higher Court: Trademark Use on Export Products Passes Test of Actual Use. 3


Developments in Trademark Practice

The Standing Committee of the National People's Congress passed a proposal to amend China's trademark law.

The proposal outlined that the amount of compensation for malicious infringement of trademarks should be up to five times the amount of actual losses, compared with three times before the amendment.

It also said the statutory compensation for trademark infringement will be raised from 3 million yuan (US$450,000) to 5 million yuan (US$750,000).  Similarly, that for trade secret infringement under the anti-unfair competition law will be raised to 5 million yuan too.

These revisions will take effect Nov 1, 2019.

In addition, according to the State Council, China will implement measures to reduce government fees and service charges, including enlarging the scope of entitlement for patent fee deductions (to-be-specified), and reducing the fee for trademark renewal from 1,000 yuan to 500 yuan, taking effect as of July 1, 2019.


China's Top Market Regulator to Strengthen Crackdown on IPR Infringements

China's State Administration for Market Regulation (SAMR) has taken measures to enhance supervision on online shopping and infringements of intellectual property rights (IPR) in imports and exports.

These measures fall into six aspects, including strengthening oversight on law enforcement, broadening sources of infringement clues, promoting the connectivity of administrative and criminal law enforcement, enhancing cooperation between government departments and firms, and improving the regulatory system.


China Boasts World's Most Applications for New Agricultural Plant Varieties Rights

China had the largest number of applications for new agricultural plant varieties rights in the world for the second consecutive year in 2018.

The number of applications exceeded 4,800 last year, almost equal to the total in the previous 10 years, according to a symposium jointly held by the Ministry of Agriculture and Rural Affairs, National Forestry and Grassland Administration and National Intellectual Property Administration.

Since joining the International Union for the Protection of New Varieties of Plants (UPOV) 20 years ago, China has approved nearly 12,000 applications.


CNIPA Enhances Protection of Integrated Circuit Layout Design

The National Intellectual Property Administration of China (CNIPA) has released the Guideline on Examination and Law Enforcement of Integrated Circuit Layout Design (tentative).

The Guideline of 88,000 words consists four parts: registration examination, reexamination and cancellation, administrative law enforcement, and licensing and pledge. Comments solicited based on the previous draft have been considered in the Guideline.

The Regulations on Protection of Integrated Circuit Layout Design came into force in 2001 in China. Applications of IC layout design keep rapid increase. In the meantime, registrations for pledge contracts, involving 50 items of IC layout designs, are handled. The first administrative case of infringement concerning the IC layout design was concluded in 2018.


China Spends Big on IPR Royalties, Values Innovation More

China has been lavishing money on IPR royalties with a 20-year streak of double-digit growth amid efforts to close a longstanding gap in technology and innovation.

China's external payments of IPR royalties rose 24% year on year in 2018 to 35.8 billion U.S. dollars, resulting in a deficit of 30.2 billion dollars, the latest data from the State Administration of Foreign Exchange (SAFE) showed.

This marked an average annual growth of 22% from 1997 to 2018 in the IPR royalty payments.

The payments mainly came in the computer, telecommunication, electronics, auto manufacturing, ship-building and aviation sectors, which accounted for more than 40% of the total. The United States, Germany and Japan were the top three exporters.


Huawei Tops WIPO Patent Applications

China's tech giant Huawei topped the list in corporate patent applications at the World Intellectual Property Organization in 2018, according to WIPO. Other remarkable Chinese applicants are ZTE ranked the 5th with 2,080 PCT filings; BOE Technology Group ranked the 7th with 1,813 PCT filings, becoming the third company in the top 10 applicants; OPPO saw a rise from 474 in 2017 to 1,042 in 2018, and jumped 23 places in the ranking to become the 17th. Tecent, DJI, CSOT also headed the list of top 50.

The United Sates last year contributed the highest number of PCT filings at 56,142, followed by China at 53,345 and Japan at 49,702. For the first time filers in Asia contributed more than half (50.5%) of all international patent applications, then Europe (24.5%) and North America (23.1%).

For educational institution applications, the University of California ranked first with 501 patent applications, while Chinese universities for the first time reached the top 10 ranking, including Shenzhen University (third with 201 applications), South China University of Technology (fourth with 170 applications), Tsinghua University (seventh with 137 applications) and China University of Mining and Technology (10th with 114 applications).

Digital communication had the largest share (8.6%) of published PCT applications, and computer technology (8.1%) and electrical machinery (7%) took the second and third spot, respectively. Transport recorded the highest growth rate (11.3%) among top 10 technologies in terms of application shares, WIPO said.



Beijing Higher Court: Trademark Use on Export Products Passes Test of Actual Use

Does it fall into the scope of trade-mark use required in the Chinese Trademark Law when the trademark is marked on export products? Centering on the question, a German firm called Aldi GmbH & Co. KG had a rift with Yijia Import and Export Trade Co.Ltd. from Zhangjiagang, Jiangsu Province.

No.6261353 trademark "CRESTON" (trademark in dispute) was filed for registration by Yijia Company on September, 2007 and would be approved on March, 2010, certified to be used on Class 9 products such as gauges.

In March2015, Aldi filed for cancellation of the trademark in dispute to the former Trademark Office (TMO) on the ground that the trademark was not in actual use for three consecutive years from March, 2012 to March, 2015 (the designated period). After examination, TMO rejected Aldi's request.

In January2016, Aldi took the issue to the former Trademark Review and Adjudication Board (TRAB). In response, Yijia furnished evidence of trade transactions, supplier contracts, customs declaration documents and exhibition attendance documents to prove actual use of the trademark in dispute in the designated period. TRAB held that the materials submitted by Yijia have formed a chain of evidence, which can prove that it has used the trademark in dispute on the approved products in the designated period. In November 2016, TRAB decided to uphold the trademark in dispute.

The disgruntled Aldi then brought the case to Beijing IP Court and got rejected later. The company then appealed to Beijing Higher People's Court, claiming that the materials submitted by Yijia Company could only prove it produced products with "CRESTON" trademark outsourced for manufacturing by foreign clients and could not prove the products marked with the trademark in dispute were sold at home. After hearing, Beijing Higher People's Court held that, although the documented evidences reveal the products marked with the trademark in dispute were for export, Yijia had true intent to use the trademark in dispute and it made the trademark known by the public through advertisement, meeting the requirement of trademark use for publicity. Meanwhile, setting up the system of cancellation of the trademark not used for three consecutive years is to activate trademark resources and refresh idle trademarks. The ultimate purpose is to push the owners to actively use trademarks instead of punishing the trademark owners. Based on nature of export trade, Yijia's relevant products cannot be exported if the trademark in dispute is revoked, which will make the trademark in dispute fail to be maintained though the company's real use of the trademark. The result will run counter to the policy of trade encouragement and the purpose of setting up the system of revocation of the trademark not used for three consecutive years. In this connection, Beijing High rejected Aldi's appeal and affirmed the IP court judgment.